LETTERS
Re “The failure of the 401(k),” Opinion, Jan. 10
This recession will show the success of the 401(k) model. I would rather have control of my 401(k), even down 30% in value, than the promise of a “defined-benefit” pension from a company out of business.
Lack of regulatory oversight has left many pension plans underfunded, which will lead to defaults, decreased benefits and another taxpayer bailout. This could be averted if all pensions, including of CEOs and federal legislators, were a pay-as-you-go 401(k) model.
Many 401(k) plans now offer investments balanced for age and risk tolerance, requiring no financial expertise. If new employees were automatically enrolled (with the option to opt out), savings would start earlier. Let us hope that our current experience will lead to even better models for the future.
Jane P. Smith
Costa Mesa
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Tim Rutten has adroitly emphasized one of the important flaws of our capitalist republic -- the lack of a retirement safety net. Social democracies in Europe, Canada and Australia provide all of their citizens a dependable, guaranteed retirement. Since the “Reagan Revolution,” our society has increasingly trusted the so-called free market to be the solution.
From the crisis in healthcare financing to our retirement funding, we are witnessing the folly of that misguided dependency.
It is high time for the public sector to reassert itself.
Bob Teigan
Santa Susana
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Rutten has to be the ultimate pessimist.
For years, everyone has bemoaned the paltry rate of savings by U.S. citizens. Along comes the financial crisis, and suddenly we find that we have saved enough to be able to “lose” trillions of dollars (according to Rutten) and yet still have money left over.
You cannot lose or gain money until you sell an asset. Those who have lost a job, as you say, have to pull money from their 401(k) and may have “lost” some previous gains.
But what would they be doing if their 401(k) did not exist? I think you have your glasses on upside down: Having savings when needed is not a failure; it is a success.
Forrest Bonner
Huntington Beach
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The 401(k) was designed precisely so employers could obviate the defined-benefit plans that were costing them a fortune. From the start, Washington and employers knew that few individual workers could save enough money from their meager paychecks to retire on.
That workers fell for the notion is staggering but not surprising. Greed obscured the fact that the big boys can afford to lose when the market goes down but the common man cannot.
Emma Peel
Sherman Oaks
